Strain improvement of pharmaceutical fermentation microorganisms reduces the cost of production of antibiotics and helps to meet the growing demand for anti-infective drugs. An important class of antibiotics which have been in increasing demand are the macrolides. Erythromycin is the most extensively produced of the macrolides, and the producer of erythromycin, Saccharopolyspora erythraea, is the model system for studying macrolide biosynthesis. Standard strain improvement is based on empirical mutate-and-screen technology, however rational manipulation of global regulators of antibiotic biosynthesis in other Streptomyces systems has led to higher-yielding strains for antibiotics such as actinorhodin. Increased production was achieved directly by increasing the copy number of the global regulatory gene or introducing a mutation into a repressor of antibiotic biosynthesis. Advances in the molecular biology of Sac. erythraea make it technically feasible to rationally engineer this strain to produce higher amounts of erythromycin. In preliminary work, two global regulatory genes in Sac. erythraea, coding for an A-factor binding protein, and a Lrp/AsnC global regulatory protein have been identified. A strategy is proposed for further characterizing and manipulating these genes to determine if they are involved in the regulation of erythromycin production and can be used for rational strain improvement. PROPOSED COMMERCIAL APPLICATIONS: Commercial strains for the production of the bulk pharmaceutical erythromycin are responsible for the production of a compound with a market value of $600 million per year, world-wide (1995 figure). Any strain that is significantly superior to existing strains would therefore be of enormous economic value. The recent development of six new generation erythromycin derivatives means the market for erythromycin as a chemical intermediate will continue to grow well into the next century.